RIVERSIDE FUND V, L.P., and RIVERSIDE AMCAD BLOCKER CORP., Plaintiffs,
VISAGAR SHYAMSUNDAR, JUPITER TECHNOLOGY HOLDINGS, LLC, RONALD F. CORNELISON, and EDWARD BERKOWITZ, Defendants.
ORDER DENYING, WITHOUT PREJUDICE, DEFENDANT VISAGAR
SHYAMSUNDAR'S MOTION FOR SPOLIATION SANCTIONS AGAINST
CO-DEFENDANT RONALD F. CORNELISON
M. DAVIS JUDGE.
consideration of Defendant Visagar Shyamundar's Motion
for Spoliation Sanctions against Co-Defendant Ronald F.
Cornelison (the "Motion for Sanctions") filed by
Defendant Visagar Shyamsundar on January 18, 2017; Defendant
Cornelison's Response in Opposition to Co-Defendant
Shyamsundar's Motion for Spoliation Sanctions filed by
Defendant Ronald Cornelison on January 31, 2017; the
arguments presented on the Motion for Sanctions at the
hearing on February 6, 2017 (the "Hearing"); the
letter to Mr. Cornelison dated November 19, 2013 and provided
to the Court at the Hearing; and the entire record in this
Delaware courts have applied the following standard when
addressing claims of spoliation-"a party in litigation
or who has reason to anticipate litigation has an affirmative
duty to preserve evidence that might be relevant to the
issues in the lawsuit, " and this duty can attach before
litigation if a party knows that the evidence may be relevant
to future litigation.
Whether a person has reason to anticipate litigation depends
on the facts and circumstances and whether these facts and
circumstances would lead to a conclusion that litigation is
imminent or should otherwise be expected. If a party
intentionally fails to preserve such relevant evidence, a
court may impose spoliation sanctions.
Sanctions are to serve three functions: to remediate; to
punish, and to deter. The Court is to consider the following
factors in determining the appropriate sanctions: (i) the
culpability or mental state of the party that destroyed the
evidence; (ii) the degree of prejudice suffered by the
complaining party; and (iii) the availability of lesser
sanctions that would avoid unfairness to the complaining
party while, at the same time, serve as a sufficient penalty
so as to deter future conduct. While Delaware courts have wide
latitude to fashion an appropriate remedy for the spoliation
of evidence, "the remedy must be tailored to the degree
of culpability of the spoliator and the prejudice suffered by
the complaining party."
Court finds that the record is insufficient to justify the
sanction of preclusion in this case. At this stage of the
proceedings, there does not appear to be enough proof that
Mr. Cornelison intentionally failed to preserve relevant
evidence in anticipation of this litigation (or the types of
claims raised in this litigation). This conclusion is
supported by Mr. Cornelison's testimony under oath that:
(i) the "recording" he destroyed was not relevant
or related to the fraud cross-claim against Mr. Shyamsundar,
and (ii) at the time he destroyed the "recording"
he did not anticipate bringing a fraud cross-claim against
Mr. Shyamsundar because the fraud claim did not accrue until
months after he destroyed the "recording."
Accordingly, the Court does not have before it sufficient
evidence proving that spoliation occurred.
Court would like to note that it is troubled by Mr.
Cornelison's deposition testimony. Even though the Court
will not order sanctions at this time, this deposition
testimony (on the transcript at least) does not appear to be
entirely convincing or credible given the normal use of the
word "recording" and/or that only certain parts of
the meeting were "recorded" while other, more
relevant portions, were not. If the parties adduce additional
evidence regarding notes, or recordings taken during the
September 13, 2013 meeting, and this evidence supports an
argument for spoliation, the Court will revisit the issue.
IS HEREBY ORDERED that the Motion for Sanctions is
DENIED WITHOUT PREJUDICE
 TR Investors, LLC v. Grenger,
C.A. No. 3994, 2009 WL 4696062, at * 17 (Del. Ch. Dec. 9,
2009). See also Brandt v. Rokeby Realty Co., C.A.
No. 97C-10-132 RFS, 2004 WL 2050519 (Del. Super. Sept. 8,
2004) ("A party, anticipating litigation, has an
affirmative duty to preserve relevant
Beard Research, Inc. v. Kates,
981 A.2d 1175, 1189-90 (Del. Ch. 2009).
Id. at 1189.